Also Too Big to Fail

If the Tea Party backlash to big government reached a high-water mark when Republican and Democratic leaders struck a deal on the budget Sunday, history should judge the movement as a failure.

Big government lives on. The American public still wants -- and, under this deal, will still get -- a public sector that will be larger over the next decade than it has been at most points since World War II. As with Reagan-era conservatives and the Republican majority in Congress during the 1990s, the legacy of the Tea Party will only be to stall government's growth; this latest push from the right won't substantially downsize -- much less starve -- the beast.

On Sunday, House Speaker John Boehner said that the deal "shows how much we've changed the terms of the debate in this town." That may be true if your memory only reaches back two years, but things look different in the larger sweep of history.

Consider some numbers.

Before the debt-ceiling deal was reached, the Congressional Budget Office estimated that the U.S. government would spend $46 trillion between 2012 and 2021. Now, the government plans to spend about $43.5 trillion. In constant 2005 dollars, this is more money than all federal spending between 1950 and 1980 -- the three decades typically seen as the golden age of active government. In turn, the U.S. Treasury is likely to collect more in taxes over the next decade than it took in between 1950 and 1988. Measured on a per-capita basis that accounts for big population increases, federal outlays are roughly three times greater today than in 1965.

Meanwhile, federal spending as a percentage of GDP is now at a historic high of 25 percent. After Sunday's deal, it will come down some but will likely remain over 21 percent through the next decade, well above the postwar average of 19.5 percent.

And don't forget about state and local governments, which weren't even part of Sunday's deal. States and municipalities spent more money in 2010 alone than they did during the 1950s. In the three decades since Ronald Reagan's election, state and local spending has increased by nearly 30 percent.

To recap: Despite a generation of right-wing attacks on government, the United States spends more overall on the public sector today as a percent of GDP than it did four decades ago -- and fantastically more in constant dollars thanks to the huge expansion of our economy. The U.S. now devotes about as much of its national wealth to government at all levels as Norway (40 percent), and we are not that far behind Germany (44 percent.).

There are plenty of reasons that government should be even bigger, especially with the Boomers retiring. Beyond footing the bill for this demographic shift, we need to rebuild our infrastructure, improve our schools, and make the transition to clean energy, among other things. It is agonizing to watch the United States choose a less prosperous and equitable future, especially as other major powers like China make the public investments needed to "win the future."

The great frustration of modern liberalism is that the conservative movement has successfully blocked the path to social democracy since the 1970s. Sunday's deal is depressing because it signals that this path will remain blocked for the foreseeable future; it's a devastating setback given the hopes raised by the progressive electoral surge of 2006 and 2008.

Yet even as U.S political elites pivot once more to the right, there is no evidence that the public wants less government in practice. Polls show high levels of support for key government programs, particularly the most expensive ones: Medicare, Medicaid, and Social Security. As a result, following through on the budget cuts will be no easy thing. It's also a good bet that state and local spending will experience another jump upward, like in the 1980s, as the federal government retrenches.

In all, the big picture suggests that the glass is both half empty and half full. The U.S. still doesn't have a public sector that can provide the economic security that citizens in other wealthy nations have long enjoyed, and Sunday's deal puts that goal even further out of reach.

But if the left's fantasy won't come true any time soon, nor will the right's: Big government is simply too popular to be attacked with a meat cleaver.

President Barack Obama set himself up to lose the budget fight in December, when he extended the Bush tax cuts but did not negotiate a raise in the debt ceiling. His critics are correct that he gave away far too much, and the budget deal is the worst turn yet in this ugly surrender.